Rep. Bob Herron opposes Parnell oil tax plan

by Mark Arehart on January 30, 2013

State Representative Bob Herron.

The 2013 Alaska legislative session is just a few weeks old and legislators are settling in to tackle some tough issues. Representative Bob Herron of Bethel thinks oil taxes is one of the top issues in the state.

“We’ve one through the pomp and circumstance and ceremony and all that. But now we’re getting down to some very serious conversations about the governor’s operating budget and capital budget,” Herron said.

He said one of the most contentious issues in the governor’s proposed budget is the plan to reduce oil taxes.

Herron said slashing taxes too drastically on oil production within the state will promote economic expansion, especially on the North Slope, but it will cost the state a lot in revenue.

“93% of the revenue that the state receives comes from oil. The other 7% is spread over mining and timber and resource extractions and other taxes,” he said.

Herron said he supports lowering oil taxes, just not the harsh slash in taxes that Governor Parnell has proposed.

Herron said slashing taxes all at once will cut state revenue and could have a negative effect on jobs statewide.

“Should we reduce oil taxes to spur production to go into the pipeline? Yes, I think we need to do that. But, it’s how much do you throttle back? Do you throttle back too quickly and the engine cops and sputters and then we’re in some really lean years? Or should we ease it back so the economy adjusts to it?”

Herron said other rural legislators oppose the proposed drastic cuts to oil taxes in Parnell’s proposed budgets.

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